Biting the hand of Project Fear

If you’re going to tell a lie, tell a big one

Better Together, they’re like a lonely hearts advert saying “Stalker seeks someone to love. Don’t bother with a pic, I’ll take one through your bedroom window while wearing a Maggie Thatcher fright mask.” They’ve really not got the hang of this love bombing business have they.

Today we had George Osborne saying he would be “unable to recommend” a currency union between an independent Scotland and the rest of the UK. Like Scottish people care deeply about what Osborne recommends. And there was us thinking that he was going to rule it out definitely. Still, if Mark Carney’s studiedly neutral speech was presented by the media as a major blow to independence hopes, it’s easy to understand why our media sooked up George’s words like viagra for the wilting Better Together campaign. They’re treating us like idiots again.

It was another of the UK cabinet’s hit and run exercises – paid for out of your tax bill. Osborne came up to Edinburgh and ran away back to London after taking a few questions from the tame media pack. He had no intention of debating the issues with anyone who might challenge his waffle. What the Chancellor of the Exchequer said was economically illiterate, intellectually risible, and morally bankrupt. Will this be pointed out by the economic experts trotted out by the BBC? Don’t go holding your breath.

Never mind Project Fear, the guy in charge of the UK economy doesn’t understand some of the most basic principles of finances and economics. The kind of principles that the rest of us understand every time we buy anything with a credit card. Now that’s really scary. It’s either that or he’s lying through his teeth, which is equally unsettling. But what’s scariest of all is that it’s equally plausible that Osborne is ignorant or a liar – or indeed both simultaneously. My pounds sterling are on the latter.

George made the jawdropping claim that if Scotland refused to accept a part of the UK national debt because Westminster refuses to let us use the pound, we would be in default and would be castigated by the international markets. This is sheer nonsense. It is a lie of epic proportions, a big lie constructed out of wee lies and wrapped up in a multicoloured tissue of untruth.

You cannot default on a debt which doesn’t have your name on it. The debt was issued by the UK government, it bears the name of the UK government, and the UK government has already stated that it alone is responsible for all existing UK debt. So how can Scotland default? The debt isn’t in our name. In no legal system can you be held accountable for a debt which belongs to someone else.

There is precedent for this. When the Soviet Union broke up, all its national debt was inherited by Russia. The other former Soviet republics did not take on one rouble of the USSR’s debts. They were not considered financial pariahs because of it. George’s threat that Scotland would be a pariah is baseless. The only pariahs in Scotland are Tory MPs.

In fact Scotland is prepared to accept a proportional share of the UK national debt – even though we are under no legal obligation to do so – but only in return for a due share of UK assets. The proposition put forward by the Scottish Government is that if the UK Government deprives Scotland of her rightful assets, Scotland will not accept any debt relating to assets which Westminster retains in full. Nae assets, nae debt. It should be simple enough even for George to grasp.

In order to make the claim that Scotland would be defaulting on its debt, George sought to deny that sterling is a joint asset. If sterling isn’t an asset then Scotland cannot justifiably claim a share in it. George dismissed Scotland’s claim to joint ownership of the pound, saying it wasn’t a CD collection. Which is true. Stick a tenner in your CD player and it won’t play anything by the Better Together Toryboyband. A currency is not a thing, it’s an abstract concept.

Continuing with the CD collection metaphor, Osborne wants us to believe that the debt the UK accrued building up its collection of the greatest hits of the Royal Artillery Marching band and its expertise in bunting bedecked musical interludes will be Scottish debt after independence, even though George is hanging on to all the CDs, the sheet music and the stage directions. We walk away from ownership of the Philip Sousa band, he told us, but oddly he doesn’t want us to walk away from the costs involved in acquiring it, training it, and developing it. In George’s wee world, Scotland should still be financially liable for the UK even after we’ve become independent. This is such an arrant nonsense that it really shouldn’t need to be pointed out.

For George, ownership apparently only extends to physical objects. A man who worships filthy lucre, who comprehends worth only in monetary terms, and he’s unaware of the concept of intellectual property. Sterling has a reputation in the international money markets, it’s a reputation based in part upon the massive contribution Scotland has made to the Union – you know all that oil, whisky, industrial exports, and the rest. Sterling is like the goodwill and reputation built up by an existing business, which influences its value when the owners decide to sell. The UK’s reputation for financial stability, the reputation George wants to protect, only exists because Scotland contributed to building it up. That reputation is as much ours as it is the rUK’s.

However if we were to accept George’s view that sterling is not an asset – then by definition it cannot possess any worth or value. Perhaps he views sterling like a much loved and battered teddy bear or a used rubber bondage outfit. No one else wants them, but George really loves them. Which in turn raises the question of why he’s so keen to maintain sole possession of something which is worth nothing commercially.

“An independent Scotland would not need England’s permission to continue using the pound sterling, and in fact would be better off using the pound without such permission.

“There is very little that an English government would actually be able to do to stop Scottish people from continuing to use the pound sterling if they wanted to.

“As the American economist George Selgin has pointed out, what the Prime Minster really means is that the Bank of England would not act as a guarantor for Scottish banks or the Scottish government. Lucky Scotland: the implied promise of a bailout from the European Central Bank is exactly what allowed Eurozone banks and governments to borrow cheaply and get themselves into a debt crisis.

“Scotland’s position would be closer to that of countries like Panama, Ecuador and El Salvador, which use the US Dollar without American “permission”, and, according to research by the Federal Reserve of Atlanta, consequentially have far more prudent and stable financial systems than if they were part of a formal currency union.

“An independent Scotland that used the pound as its base currency without the English government’s permission, with banks continuing to issue notes privately and private citizens free to choose any currency they wanted, would probably have a more stable financial system and economy than England itself.

“It’s up to Scots to decide whether they want independence, but the Chancellor’s announcement today should be seen as a feature, not a bug.”

Whatever way you look at Better Together’s arguments, they mire you in confusion and contradiction. So no change there then. Just more lies, more threats, and more fear. And this shower of miserablist selfish self-servers want us to think that we’re Better Together with them. They’re not painting a very attractive picture of themselves are they.

My opinion is that, without a currency union, Scotland should continue to use the pound for a short time after independence, but move quickly towards having our own currency, initially pegged to sterling. Then, if sterling shows signs of crashing, the link can be broken and the Scottish currency allowed to float. It is right to continue to offer a currency union in the meantime; if Westminster turn it down, then they are the ones likely to suffer the most, but economic problems in the rUK will also affect Scotland as a major trading partner.

Also, why did the BBC’s advance report of Osborne’s speech misrepresent what he would say? Was it a mistake, or was it so that they could have dramatic headlines, knowing that their impact would not be cancelled out by more subdued reports of the actual speech? Either way, it is yet another example of why the BBC cannot be trusted.